Georgia Tech Procurement Assistance Center

6 quick fixes that will improve your company’s win rate

By

We’re frequently asked how to improve a company’s overall win rate, and I outlined these in the article I wrote in my January 2012 column “How to Raise Your Win Rate by 20 percent” using our seven-factor model. Since then, we’ve been surveying companies to see how well they perform in these seven factors and to identify areas where companies can make immediate improvements.

In this article, I’ll share some of the survey results and show you immediate actions you can take to help raise your company’s overall win rate.

In February and March 2012, we conducted two surveys – one with the Association of Proposal Management Professionals and the other with the Deltek GovCon team. The surveys asked proposal managers, capture managers, and business development professionals to rate how well their companies performed in each of the seven factors. We used 28 questions in the survey to measure performance and to pinpoint areas where companies could make improvements to raise their win rates. Based on the survey, here are six quick fixes that most companies can make to improve their win rates.

1. Capture and Proposal Training: Only 52 percent of the companies surveyed provide career development and professional training for their business development, capture management, and proposal development staffs.

Every company should have career development plans for its employees and offer professional development training for its management, key employees and especially for those people involved in business development, capture management, and proposal development. They should also provide training in proposal writing for technical and managerial professionals to help them write more compelling proposals.

Companies can develop these training programs internally or contract the training to companies that provide such specialized training. However you do it, some training is better than no training. By offering this kind of training, you can immediately leapfrog half the companies in your market.

2. Business Acquisition Process: 54 percent of the companies surveyed have not documented their business acquisition processes.

It is an indisputable principle that having a well-structured business acquisition process increases business acquisition effectiveness and reduces cost, yet half the companies surveyed compete using undocumented processes. Documenting these processes is the first step in raising the maturity of the business acquisition process. All companies of any reasonable size should have defined, repeatable businesses acquisition processes covering the business development, capture, pre-proposal preparation, proposal development, and post-proposal submission phases of the business acquisition life cycle. These processes should be fully supported by management and used for all new business acquisition.

3. Capture Management: Only 33 percent of companies review their capture progress and use these reviews to make management decisions about pursuing or continuing to pursue new business opportunities.

Companies should evaluate every new business pursuit monthly and make an affirmative decision to continue, delay or suspend the pursuit. If no reviews are conducted, then every new business opportunity remains in play, even when it is clear that the company can’t win. Proper capture management reduces the effort spent on opportunities that are likely to be losers and focuses effort on opportunities with a better chance of winning. Measuring capture progress and making associated management decisions also are essential parts of the business acquisition process and necessary for increasing your win rate.

4. Management Decisions: Only 45 percent of companies surveyed use gate reviews as part of their business acquisition process.

The purpose of gate reviews is to ensure that management makes timely decisions about continuing to invest in a new business opportunity and to provide an opportunity for executive management to coach the capture team on how to raise its win probability. These gate reviews are fundamental to effective and efficient acquisition of new business.

5. Annotated Outlines: 70 percent of proposal writers begin writing their assigned sections before management has approved what they are going to write.

Annotated outlines or storyboards probably are not used. If they are used, they are not reviewed and approved by management. No wonder there is so much rewriting involved in completing typical proposals.

6. Proposal Quality: 37 percent of companies surveyed said their proposals suffer from errors that could cause them to lose bids.

Professionally developed proposals do not have these problems. They are always compliant, compelling and responsive. Major improvements in proposal quality are still need by many companies.

Compete survey results are available on our website.

About the Author: Bob Lohfeld is the chief executive officer of the Lohfeld Consulting Group. The article was published by Washington Technology on Apr. 23, 2012 at http://washingtontechnology.com/articles/2012/04/23/lohfeld-7-quick-fixes.aspx?s=wtdaily_240412.

Here’s how to raise your win rate by 20 percent

By

All executives want to increase their win rate. If you could raise your company’s overall win rate by 20 percent, the payoff in additional revenue, earnings and shareholder value could be huge. Company revenues would increase, earnings would increase by the marginal profit rate on the new revenue, and shareholder value would increase proportionally to your increase in earnings.
But knowing which investments to make and predicting the payoff is the challenge. Here’s how to choose your investments and predict the resulting increase in win rates.
First, let me make sure everyone understands that we are talking about the investment you make to improve your company’s overall win rate. This is the average win rate on all proposals your company submits, not your win rate on a specific proposal. (We use a different model to predict the outcome for individual bids.)
7-Factor Model
To predict increases in overall company win rates, we use a 7-Factor model. Since we are not aware of any other models that do this, we’ve called it the Lohfeld 7-Factor Company Win Rate Model.
While the model predicts overall company win rates, more importantly, it also predicts how a company’s win rate is affected by changing investments in these 7 factors—and that’s what we’re after. If we can predict how the win rate is affected by changes in the 7-Factor score, then we can make investments with confidence, knowing that we can predict the resulting win-rate increase.
The 7-Factor score is based on:
  • People: The skills and experience of the people involved in creating proposals.
  • Business acquisition process: Business acquisition maturity covering the five stages of business acquisition lifecycle.
  • Tools: Proposal infrastructure and personal and productivity tools.
  • Management decision-making: Qualification and bid decisions.
  • Solution competitiveness: Competitive solution with good features and customer benefits.
  • Proposal quality: Quality proposals that are always compliant, responsive and compelling.
  • Winning culture: Winning culture with good work/life balance.
We assess each of the seven factors using four yes/no questions. Each yes answer contributes one point to a company’s overall score. A perfect assessment scores 28 points and, by the way, we have never seen a company earn all 28 points. Each question takes 15 seconds to read and answer. With seven factors and 28 questions, it takes seven minutes to complete the assessment to see how your company rates in each factor.
Here’s an example of how the assessment works. The first assessment factor is People. Skilled people write better proposals than those who are not so good at it. To assess the skill and experience of the people working capture and proposals, we ask four questions. The answers are based on the skill and experience of your internal staff as well as consultants you use.
RELATED MATERIAL
To take the full questionaire and receive a presentation that explains the 7-Factor Model, click here.

The first question is, “Does your capture and proposal core team include your best and brightest professionals, and do they know how to create winning proposals?” You get one point if your answer is yes and zero points if the answer is no. You get a second point if you answer yes to the question, “Are your Proposal Managers always well matched to their assignments and do they always have the right leadership qualities and experience level for the assignment,” (or if you don’t have the right person available from your in-house team, you go outside your company for proposal management support). You get a third point if you have a career development plan for your proposal professionals, which includes professional development and skills training. You get a fourth point if you can readily add additional proposal resources to augment your team to accommodate fluctuating workloads.

Answer each of these questions with a yes or no. Each yes gets one point, and each no gets zero points. If your answer is somewhere between yes and no, give yourself a half point. Once you complete your 7-Factor Assessment score, you’re ready to begin looking at investments.
Selecting investments to raise your win rates
Your strategy is to make company investments that will raise your 7-Factor Assessment score. The higher your assessment score, the higher your overall win rate will be.
To see which factors to improve, plot your scores on our Lohfeld 7-Axis Diagram. The Lohfeld 7-Axis Diagram provides a graphical representation of your assessment scores and shows at a glance those factors that need to be increased via investments. Invest in factors with the lowest scores first since generally they have a greater variety of investments that will raise your score. Make the least costly investments first with the objective of investing the least amount of money to get the highest increase in scores.
Let’s assume that a company wants to make investments to raise the People factor. If the scorers went back to their assessment scores, they might find that one of the contributing factors to the low score was that they didn’t have a professional development training program for their capture and proposal staff.
Since the company can implement such a program inexpensively, this should be their first planned investment. Similarly, they would use their assessment scores in the Process and Tools factors to guide them in selecting appropriate investments to raise their scores for these factors.
Using this approach, the company would build a plan of investments to raise its 7-Factor scores systematically and thereby raise its win rates.
Calibrating the model
To measure how much a company’s win rate increases with increases in 7-Factor scores, we worked with the Association of Proposal Management Professionals (APMP) and had 45 proposal managers assess their companies and correlate their assessment scores with win rates. We did this exercise at the APMP Nor’easters Chapter Fall Symposium 2011 and the APMP Southern Proposal Accents Conference. Our survey results solidly confirm that companies with higher 7-Factor Assessment scores had higher win rates.
From the APMP data, we found that government contractors with a 20 percent increase in their 7-Factor Assessment score on average yielded a 20 percent increase in their win rate. Clearly, government contactors should strive to increase their 7-Factor scores since the modest investment can produce large payoffs in new business revenue.
We also found that on average companies in the government market had 17 percent higher 7-Factor scores and 28 percent higher win rates than companies in the commercial space.
Perhaps government-market win rates track more closely to the quality of capture and proposal work, whereas commercial proposals are more broadly influenced by brand marketing.
Predicting Your Return on Investment
As a general rule, your win rate percentage will increase point for point with the increase in your 7-Factor score. This rule applies to companies that develop enough proposals each year that they have a good proposal team, some established processes and are doing reasonably well winning their share of bids.
Your company needs to have enough proposal volume to produce an economic payoff for making the investments. Your company also needs to have a reasonable win rate established as a starting point.
If you have a very low win rate, there may be other serious problems that need to be fixed before you fine tune your business-acquisition efforts.
Here’s what a typical company might expect. (Stick with me because there is some math here, but I promise nothing more complicated than multiplication and division.)
A typical government contractor graduating from the small business program might have $40 million a year in revenue, a 30 percent win rate, and a 16 for its 7-Factor score.
Let’s assume the company must generate $20 million in replacement revenue just to stay even and wants to grow revenue by 20 percent ($8 million) next year. To do this, the company must have $28 million in new revenue next year.
If awarded contracts have a nominal 5-year period of performance, then the company has to win $140 million in new business. If its win rate is 30 percent and the win rate doesn’t drop after graduation, then the company has to bid $466 million to produce $28 million in new revenue next year.
Now assume that the company selects investments that will raise its 7-Factor score by 20 percent with the expectation that this will result in a 20 percent increase in its win rate. Increasing the win rate by 20 percent means the win rate will go from 30 percent to 36 percent. This will produce additional revenue equal to 6 percent of all bids the company makes.
In this example, 6 percent of $466 million is an additional $30 million in revenue. If the marginal profit rate is 5 percent, the investments would drop $1.5 million to the company’s bottom line.
From a shareholder perspective, the additional $30 million in new business spread across a 5-year period of performance would bump up revenue by $6 million next year and could increase shareholder value by the same amount, assuming shares are valued at 1 times revenue.
Now compute the ROI. Assuming our example company needs to make $200,000 in investments to raise the 7-Factor score by 20 percent, and the revenue increase produced an additional $1.5 million to the bottom line, then the ROI ratio would be 7.5 to 1. I believe this is called a no brainer.
Make the investments and move on to enjoy your new-found prosperity.
About the Author: Bob Lohfeld is the chief executive officer of the Lohfeld Consulting Group. E-mail is robert.lohfeld@lohfeldconsulting.com. Published Jan. 5, 2012 by Washington Technology at http://washingtontechnology.com/articles/2012/01/04/increasing-your-win-rate.aspx?s=wtdaily_060112.

6 reasons your proposals fail

By

I received a call from a mid-sized “large” business that had submitted a proposal for IT services and had just learned their proposal did not make competitive range. They were irate and wanted to protest, alleging that the government had not fairly evaluated their proposal.

They had hired a proposal consultant, spent lots of money developing their proposal, and were assured their proposal was professionally done. Before filing the protest, the company asked me to review their proposal. Here’s what I found when I did the review and what I told them.

Professionally developed proposals always have the same characteristics — they are compliant, responsive, compelling and customer focused. They present a solution that is easy to evaluate and score well — and they are aesthetically attractive. I used each of these criteria while reviewing this company’s submission.

Compliance

The proposal’s structure is expected to follow the request for proposal’s instructions (section L of this RFP) and also track with the evaluation criteria (section M).

Initially, this proposal followed section L, but then it departed and added sections not called for in sections L or M. It then skipped required section L topics. Finally, some evaluation criteria were never addressed in the proposal. The easiest way to lose points during an evaluation is to not follow the instructions or not address the evaluation criteria. Simply put, this proposal was non-compliant.

Responsive

The content of each proposal section must respond precisely to each topic prescribed in the RFP. The section headings should track to the RFP instructions, and the associated discussions should be consistent with the section headings. When proposal text fails to address the sections heading, the sections are non sequitur, e.g., an applicable response does not follow a particular section title.

The proposal seemed to have section text that was lifted from other proposals and pasted into this proposal. The responses were close, but not close enough. To the non-practitioner, much proposal text sounds alike. After all, if the RFP asks for a QA Plan and we give them a Configuration Management Plan, who would know the difference? This proposal team did just that. I scored some of the sections a zero because they failed the responsiveness test.

Compelling

This is a proposal term that describes how convincing or persuasive the proposal is. In government procurements, we expect the proposal to meet the solicitation requirements fully and exceed those requirements, where practical, in a way that is beneficial to the customer. There should be many features in the proposal that demonstrate a high likelihood of contract success or that exceed solicitation requirements. Assertions about company performance and claims about solution features should be substantiated by real evidence, not boastful rhetoric. Features with relevant and substantiated benefits, presented persuasively, provide the basis for selecting one bidder’s proposal over another.

In this proposal, as I read through 200 pages of hum drum technical prose, I found features were few and benefits were even fewer. There was no basis for differentiation and no compelling basis for selection. This was not the way to write a proposal.

Customer-focused

Proposals are customer focused, and marketing brochures are company focused. A customer-focused proposal discusses how your company proposes to do the work and the benefits the customer will receive from your performance. If the proposal just brags about how good the company is and how outstanding its processes are, then the proposal is company-focused at best. Company-focused proposals cause evaluators to lose interest, whereas customer-focused proposals hold evaluators’ interest and score higher.

Slogging through 200 pages about how good this company is does not substitute for a cogent explanation of what the company planned to do and how it was going do it. If I had read one more time that their processes were “best of breed” or “world class,” I think I would have just closed the book and quit reading.

Easy to evaluate

Evaluators generally start their review with the proposal evaluation criteria in section M of the RFP. They build an evaluation checklist, and then go looking through the proposal to find information that addresses the topics in the evaluation checklist. They search for only what they need to find to evaluate the proposal and write up their evaluation results. Call-out boxes, pull quotes, feature/benefit tables, sections headings and other techniques help draw the evaluator’s attention to the appropriate information. Every evaluator will tell you that if they can’t find it, they can’t score it. Professional proposals are structured so the key evaluation points are extremely easy to find and evaluate.

As you might expect, in this proposal, key evaluations points were missing or not readily found.

Appearance

Proposals should be attractive and easy to read. They should have a consistent document style, appropriate color pallet, paragraph labeling and numbering scheme traceable to the RFP, and an appropriate mix of text and supporting graphics. Single-column text is fine with half-page or quarter-page-size graphics positioned consistently on the page. Graphics should convey the intended message with the appropriate level of detail.

The proposal was attractive, and if you didn’t read the content, it looked like it would score pretty well. I gave them high marks for attractiveness and accolades to the desktop publishing team.

At the end of my review, I told the company executives to save their protest money. In this case, the government did them a favor by eliminating their proposal from the competitive range. This proposal was not professionally done, even though they thought it was, and it had no chance of winning. After the review, they agreed not to protest and resolved to do better next time.

About the Author: Bob Lohfeld is the chief executive officer of the Lohfeld Consulting Group. His e-mail is robert.lohfeld@lohfeldconsulting.com.  This article was published Oct. 7, 2011 by Washington Technology at http://washingtontechnology.com/articles/2011/10/03/insights-lohfeld.aspx?s=wtdaily_181011.

6 keys — and a caveat — to winning bigger contracts

By

In sports parlance, it’s known as going for the gold. The term also applies in government contracting, as more and more companies are seeking the gold to be found in the large federal indefinite-delivery, indefinite-quantity contract vehicles.

“Come July and August, the IDIQs light up like Christmas trees,” said Paul Strasser, senior vice president and general manager of Dynamics Research Corp.’s federal group. “There are task orders going out like crazy because, with the continuing  resolutions, agencies are trying to spend the money they have allocated. The IDIQ has become by far the vehicle of choice. So you have to prepare.”

“The smarter smaller companies are looking at the vehicles earlier and seeing what resources it’s going to take to win,” said Mark Amtower, co-founder of the Government Market Master certificate program at the George Mason University School of Management and a Washington Technology contributor. “The large companies have two avenues. They can buy a company that owns the IDIQ or wait until the recompete and try to win it. However, there are no guarantees for the recompete.”

1. Consider M&A to open doors

Paul Bell, president of Dell Inc.’s Global Public and Large Enterprise sector, makes no bones that Dell is taking the mergers and acquisitions route.

He said Dell is still in the early stages of its M&A activity even though the giant hardware and services company has acquired nine companies in just 18 months.

“We think this has been a really good approach for Dell,” Bell said. “Our integration of our very biggest platform, Perot Systems, is going incredibly well compared to a lot of people’s experience in that [government provider] space.”

Dell’s marketing strategy is to serve its federal clients with the unified face of one company, Bell said. “That won’t change even if we add 25 more companies, which is likely in the coming years,” he said but declined to go into specifics about future M&A targets.

DRC’s capture strategy always includes IDIQ contracts. “If you’re not playing on certain IDIQ contracts, you’re really left out in the cold,” Strasser said.

Next: Focus on key markets

2. Focus on key markets

Strasser said DRC has been successful because it concentrates on its five core market segments: homeland security, health, cybersecurity, intelligence and Defense Department strategic programs, and financial and regulatory agencies.

Its IDIQ wins include the Internal Revenue Service’s Total Information Processing Support Services contract, General Services Administration’s Alliant contract, the Army’s Program Management Support Services and Homeland Security Department’s Enterprise Acquisition Gateway for Leading Edge Solutions (EAGLE) contracts.

Strasser said DRC identifies new targets at twice-yearly strategic planning sessions during which the company determines the government’s needs and its funding levels.

Company executives also attend independent analysis sessions and participate in a number of industry associations.

“We have people in key positions to not only be aware of changes in the industry, the legislation and how the money is being budgeted but also to sort of influence those [groups],” Strasser said.

DRC’s fastest-growing market is health care, an area in which the company had virtually no business just five years ago.

Next: Invest wisely in targeted sectors

3. Invest wisely in targeted sectors

Strategic investment discussions, off-site company assessments and peer reviews that began about five years ago led to action plans for DRC to target federal health care contracts.

“Today in the federal group that I manage, we’re going to do over $30 million this year in health-related services and solutions,” Strasser said.

As an example, he cited the $19 million Tricare Evaluation, Analysis, Management and Support, a Military Health System Category 2 acquisition contract that DRC won last year thanks to its management consulting expertise. DRC is helping the Walter Reed Army Medical Center manage its Base Realignment and Closure movement.

“We identified that [opportunity] three or four years ago,” Strasser said. “We said we’re committed to that market. We identified a vehicle we thought we had an opportunity to win. We put resources and investments against that to identify the capture of that vehicle. Once we won that vehicle we invested additional resources to pursue task order opportunities there.”

Although DRC does not have a chief medical officer, its staffing does include clinicians and doctors.

Next: Plan ahead

4. Plan ahead

About a year ago, American Systems Corp., which historically sought smaller contracting vehicles, introduced a plan to create a business development system and pursue some of the larger prime contacts, including IDIQs, President and CEO Bill Hoover said. “And the good news is we’ve actually followed through on that plan.”

Hoover said that after he joined the company in 2006, ASC instituted an infrastructure investment plan to strengthen its five key market targets: command, control, communications, computers, intelligence, surveillance and reconnaissance; acquisition and logistics; readiness; homeland security; and national intelligence.

“We also expanded our recruiting function significantly as well because we knew that was going to be important, too,” Hoover said.

“I would say that probably our back office, which really is the infrastructure side of the business, was probably about 60 or 70 people. And we’ve probably increased that by about 50 percent or so,” he said.

Another goal was to strengthen ASC’s capture management program and establish a project management office to oversee the company’s IDIQ contracts and meet the needed quick turnaround on task orders.

“Although the bulk of the investment was probably back in the 2006-2007 time frame, we continue to invest in our infrastructure to make sure that we can be as responsive as we can possibly be on these opportunities,” Hoover said.

Next: Hire the right people

5. Hire the right people

In addition, ASC is aggressively expanding its pipeline of individuals “so that we have a living and breathing database of candidates for a variety of opportunities in the focused business opportunity areas that we’re interested in pursuing,” he said.

ASC uses that database to strengthen its proposals whether it is pursuing an IDIQ or a large single-award prime contract. To keep the database current and growing, executives attend job fairs and conduct informational seminars.

“We have that database of [potential contract and current] employees that we can very quickly pull together because, on the IDIQ side, you have a very rapid turnaround of proposals, and we can then provide the résumés to go after those faster-turnaround opportunities,” Hoover said.

“We’re constantly looking for individuals with the requisite experience, the requisite customer focus, the requisite capabilities,” he said, adding that this is particularly true when going after an IDIQ or task order from the intelligence community in which background checks and security clearances are critical.

“The name of the game has changed with the government predominantly using some of the larger vehicles,” said Shiv Krishnan, chairman and CEO of Indus Corp., who recently hired Terry Fitzpatrick as vice president to oversee business development and growth.

Next: Build your infrastructure

6. Build your infrastructure

Indus emerged from the small-business program about 10 years ago and positioned itself to go after large contracts, including governmentwide acquisition contracts, known as GWACs, he said.

“If you do not bid on these GWACs, then you’re shut out of opportunities coming through those [awards] and those [represent] billions of dollars of opportunities for the next seven or 10 years,” Krishnan said.

Indus set up the infrastructure to compete for GWACs by meeting government requirements, such as having an earned value management system, a government-approved purchasing system, Capability Maturity Model Integration certification, and positive past-performance evaluations.

“You need to be positioned; you need to be close to the customer,” he said. That’s what Fitzpatrick’s business development team does two to three years in advance, Krishnan added.

Indus was successful in 2009 when it bid for a spot on the 10-year, $50 billion Alliant contract. “That was a feather in our cap and the beginning of our [capture] strategy,” Krishnan said.

For several years Indus tracked the planned EAGLE II, Network Centric Solutions II and National Institutes of Health’s 10-year, $20 billion Chief Information Officer — Solutions and Partners 3 awards. When they finally were announced in 2010, the company was ready to bid on all three, Krishnan said. The company also is adding health IT capabilities.

GWACs and agency-specific enterprisewide acquisition contracts have been popular, he said, because the government does the upfront work of selecting qualified contractors, and the competition to perform the task orders is limited only to those companies.

Next: A word of caution

A word of caution

However, Kevin Plexico, vice president of research and analysis services at Deltek Input., a market research and intelligence firm, cautions against relying too heavily on GWACs, including Alliant and NASA’s Solutions for Enterprise-Wide Procurement.

“We haven’t seen them trend up in five years,” he told a gathering of contracting executives last month. “They’ve been relatively flat while those agency-specific task order-based contracts have been taking off.”

“What we’re seeing is larger agencies are establishing their own task-order based contracts,” he said. “We see that all the military branches have moved this way.”

That trend is expected to continue, effectively reducing the number of prime contract opportunities, Plexico said.

For example, he said, about half of DHS’ IT services go through the EAGLE contract.

“If you don’t have a position on EAGLE, you can effectively think about your opportunity inside DHS as being limited to the other 50 percent that’s outside the EAGLE contract,” Plexico said.

In addition, the growth of task orders has greatly reduced the time frame in which to pursue them compared to the traditional 30-, 60- or 90-day response time for traditional requests for proposals.

Plexico said a Deltek Input study of about 11,000 task orders from 18 contract vehicles found that more than half of them required contractors to respond in less than two weeks.

“So this will challenge even the most agile of contracting and bid proposal organizations to respond,” he said. “This is fundamentally changing how companies are organizing their proposal organizations.”

— About the Author: David Hubler is the associate editor of Washington Technology.   Published 7/1/2011 at http://washingtontechnology.com/articles/2011/07/05/cover-steps-to-big-contract-wins.aspx?s=wtdaily_060711

Executives reassess how to grow during tough times

By

Contractors are reassessing their go-to-market strategies and looking for ways to control costs because of budget delays and the expectation that government IT spending will flatten for several years.

But, they insist, they are not unduly worried about the future of their industry.

“We haven’t seen that [decline] yet,” said Stanton Sloane, president and CEO of SRA International Inc.  “We are anticipating that things will slow down a bit.”

Until Congress passes a 2011 budget that President Barack Obama signs into law, “I don’t know whether that’s a big problem or a little problem,” he added. “The uncertainty is a problem.”

“The environment today just requires a lot of focus and attention,” said Unisys Federal Systems President Ted Davies. “I’m not sure I would describe it as anything like business as usual because I think the contracting environment is tight.”

Davies said that in addition to the budget delays, there are also delays in issuing requests for proposals and contract awards. “The government is working very carefully to preserve its dollars,” he said. “It’s a tight environment today.”

“This is not a good industry right now for the timid,” said Brad Antle, CEO of Salient Solutions Inc., a federal IT and engineering company that he co-founded in 2009.

Focus on opportunity

Many company executives “don’t want the hassle of where we are right now in terms of trying to manage through the budget morass,” said Antle, who added that he believes this is actually a time of opportunity for companies that can remain flexible and focus on the growth areas of government.

“I’m actually excited about where we are, not concerned at all,” he said.

And Antle is not alone in being bullish.

“I’m pretty excited about the prospects going forward,” said Paul Cofoni, president and CEO of CACI International Inc., who said he preferred to view this period as “a sea of opportunity.”

Although CACI derives about 75 percent of its revenue from the defense sector, Cofoni called Defense Secretary Robert Gates’ five-year, $100 billion Defense Department reprioritization plan “more of an opportunity than a threat” because it targets mostly large DOD programs that do not involve the company.

“Neither Republicans nor Democrats are suggesting that we should have radical cuts in defense,” he said.

Davies said he doesn’t believe Unisys Federal will be severely affected by Gates’ plan because his clients are mostly civilian agencies. Some of the DOD consolidation initiatives play into Unisys’ strengths, he said, so “we actually see some opportunities.”

Not having a federal budget so far into the year “is problematic for all of us in the industry,” Cofoni said. “Our customers can’t get a long-term view of what their budgets will be” because under the continuing resolutions that have kept the government functioning, agencies pay contractors only for work already awarded, he said.

“But they’re only funding us in small chucks or increments,” Cofoni said. “Whereas they might have been funding us in three-month or six-month increments, now they’re funding us in a month increment or, in some cases, two-week increments.”

Sloane, who has experienced several federal budgeting down cycles, said, “This one is a little complicated because the macroeconomic situation is a little worse than I remember them to be.”

However, current contract work is keeping SRA busy.

In addition, the company’s balanced client base — about 50 percent of its work derived from the defense and intelligence sector and the remainder from the civilian agencies — “gives us a little bit of buffer,” Sloane said. “More of an issue for us is delays in the new contracts [being awarded] versus the number of new opportunities.”

Make sound investments

In any case, echoing other contracting executives, Sloane said this is not the time to cut back on pursuing new business or investing to meet new opportunities.

“If anything, we’re increasing that investment,” he said. “When times get tight, you have to be more competitive. You have to write better proposals; you have to have better solutions for the customers that win the jobs.”

Richard Pineda, who was named vice president and general manager of Dell Services Federal Government in 2010, said the simultaneous budget uncertainly and the tight spending constraints offer an opportunity to take what he called an aggressive offense to increase sales.

“It’s a back-to-basics management” for Dell Services, Pineda said, citing prudent strategic planning, financial discipline and a focus on execution.

He said he and his executive team are working “to find the recipe to grow and thrive” despite the continuing resolutions, which, he added, could happen again in 2012.

Citing Federal CIO Vivek Kundra’s call for agencies to act more like commercial entities and share existing IT infrastructure when possible, Pineda said new business opportunities could include storage capacity and help-desk consolidation.

Agency CIOs “are actually champing at the opportunity” to share, Pineda said. “That’s an easy growth path to me.”

To take advantage of that opportunity, Pineda said he is hiring solutions and subject-matter experts who can create the synergistic opportunities that Kundra wants.

Control costs

At the beginning of the year, fiscal uncertainty and the prospect of flat budgets in 2012 and beyond prompted SRA International to reduce its workforce by about 50 employees who were not directly involved in government contracting, such as the human resources specialists and legal staff members, Sloane said.

“What we’re trying to do is keep our finger on overhead costs generally,” he said, citing other steps such as reducing power consumption and cutting back on mobile communications charges and travel expenses.

Antle said Salient Solutions is dealing with those challenges by maximizing the use of its facilities.

“As we grow or combine, we’re trying to make sure that we have a strategy that gets the most use out of the facilities space that we have access to,” Antle said, because it’s easier and cheaper to lease temporary space when it’s needed than to pay for unused space over the course of a lease.

“You don’t want to plan too far out in terms of space requirements because the future is uncertain,” Antle said. “The further out you get, the more difficult it is to plan correctly. And the wrong call can be devastating.”

To those who believe that cutting sales or marketing staffs should be among the first steps taken toward reducing a company’s budget, Antle said that’s the wrong approach.

“It’s easy to cut them because you don’t feel the effects for a year or two, or sometimes even longer,” he said. “So in the short term it feels good. It positively impacts your bottom line, but you’re sacrificing long-term growth.”

Bill Parker, Salient’s chief operating officer, said hiring employees who are strong in several areas of sales or marketing can help a company grow without overburdening the payroll.

Antle said it’s also important to recognize the best talent among the back-office employees who do not contribute to billable hours. They are often best equipped to expand their capabilities and handle new challenges should it become necessary to reduce staffing.

“That lets you keep the organization lean in the back office,” Antle said.

And it would be even better to find ways for the back-office staff to generate some revenue, perhaps by billing a customer for some in-house program control, supply chain management or purchasing work, he added.

“That now takes an expense and turns it into revenue,” Antle said. “You get a twofer, you decrease your expense and increase your revenue.”

Company benefits are another area that needs to be carefully vetted for potential savings, Antle said.

“You need to make sure that you have plan alternatives to keep costs down and put employees in control of their benefits,” he said. “If you’re spending money on benefits and they don’t value it, it’s a waste of money.”

Antle said many businesses will spend according to their business plans rather than base their expenditures on actual performance.

“That’s a real trap that some businesses fall into,” he said. “Not spending ahead of your performance is a critical issue. Treat every dollar of spending like an investment.”

“I start with, ‘What am I going to protect?’ ” Davies said. “If it’s a tight environment, what do you try to focus on?”

He said his spending centers on the three assets that he believes are crucial to Unisys Federal’s long-term success: staff, product and sales.

“This is a marketplace that requires lots of time and energy to be spent to sell work,” Davies said. “We’re trying to build a long-term, sustainable, profitable business,” Davies said.

Unisys Federal is also trying to maximize its existing solutions to save on research and development costs.

“Why go out and re-create the wheel when you don’t have to?” Davies asked. “We’re spending a lot of time making sure that where we’ve built solutions for commercial clients we can leverage them in the federal [sector] and vice versa. That obviously saves you money by not having to develop from scratch.”

Davies added that he and his team have always examined prospective contracts closely before bidding on them, but now they are now looking even more closely.

“You can spend a lot of money on opportunities that actually never come out because there’s not enough money in the [agency] budget,” he said.

— About the Author: David Hubler is the associate editor of Washington Technology – published Mar. 31, 2011 at http://washingtontechnology.com/articles/2011/04/04/strategy-opportunities-in-federal-budget-delays.aspx?s=wtdaily_110411.

5 ways to shape how agencies pick winning proposals

By

Agencies have broad discretion in establishing evaluation criteria for their procurements, subject to some limitations set by federal acquisition regulations. Those criteria are often shaped by arguments that competing contractors make during the procurement’s capture phase. Here are some ideas to consider in shaping the evaluation criteria in your next must-win procurement.

Factors and subfactors

Every procurement must be evaluated based on evaluation factors and subfactors established before the release of the request for proposals. The government tailors those factors and subfactors to represent areas of importance for source selection and provide a basis for meaningful comparison among competing proposals. Agencies have broad discretion in establishing evaluation factors and subfactors and determining the relative importance of those factors. As a capture manager, you want to discuss those factors and their relative importance and offer guidance to the agency, if requested.

Technical, management and other evaluation factors

Noncost evaluation factors must be established to assess the quality of proposed solutions, services or products. Those factors can include technical approach, management capability, personnel qualifications, prior experience or small-business participation, among others. Some agencies prescribe a standard set of evaluation factors for their procurements and then add factors specific to a procurement as needed. As a capture manager, you want to know what factors are required and what optional factors the agency might consider. After an agency selects factors, it tailors subfactors for each one to outline important considerations in the procurement and provide a basis for comparing bidders. Agencies have broad discretion to set subfactors for each procurement.

Past-performance evaluation factor

Past performance is a mandatory evaluation factor, and agencies must include it in every procurement that exceeds the value of the simplified acquisition threshold, unless the contracting officer specifically excludes it. The agency describes its approach to evaluating past performance and usually requires bidders to provide past-performance contract summaries for relevant contracts of similar size, scope and complexity. Past-performance selection criteria can be defined broadly or narrowly. For example, past-performance contract references might be restricted to contracts performed or completed in the past three years. Narrow definitions can eliminate some excellent contracts from being presented as past-performance examples.

For procurements that offer a significant opportunity for subcontracting, past-performance evaluation must include an assessment of how well the bidder met applicable small-business goals in previous contracts that required subcontracting plans.

Price as an evaluation factor

Price is a mandatory evaluation factor for contracts, including best-value procurements. However, its relative importance can vary. For example, when mission success is important to the agency, the relative importance of price in the evaluation criteria can be lowered in comparison with other evaluation factors. For commodity procurements or nontechnical services, the relative importance of price could increase. In the extreme, some procurements raise the relative importance of price to such a high level that the RFP will state, “Award will be made to the technically acceptable, lowest price (TALP) offeror.” That TALP evaluation criteria should never be used for technical or professional services. The RFP will state that all evaluation factors, when taken together, are significantly more important than, equal to or significantly less important than price.

Capture manager’s role in shaping the evaluation criteria

Capture managers should not leave evaluation factors and subfactors to chance. After an agency releases an RFP, those factors and subfactors are set and cannot be changed without considerable effort on the part of the agency. Shaping evaluation factors to highlight important considerations in a procurement can make the difference between your company being a winner or a loser.

About the Author: Bob Lohfeld is the chief executive officer of the Lohfeld Consulting Group. Published in Washington Technology on Jan. 21, 2011 

Contracting News

Read More

Contracting Tips

Read More

GTPAC News

Read More

Georgia Tech News

Read More